Additionals Too

7/28/2019 Additionals Too

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I INTRODUCTION

1.1 ABOUT THE STUDY

This report is about the organization study that I had done in RELIANCE

INDUSTRIES LIMTED, JAMNAGAR as a part of my curriculum. The

organization study at RJIL was to understand the functions and duties of

different departments of the organization.

1.2 SCOPE OF THE STUDY

The study helps to know about the different departments in RJIL. The study

also focuses on its functioning, various rules, and regulations policies etc.

followed by each department. The study was undertaken by visiting the

Administrative office and the refinery and was done over a period of 24

days.

1.3 OBJECTIVES OF THE STUDY

To familiarize the function of the organisation.

To familiarize with the different departments in the organisation, the

structure and their Functioning.

The main objective of the study is to know the mission, vision, strength, and

weakness of the organization.

To understand how key business processes are carried out in organisations.



1.4 METHODOLOGY

The aim was to study different departments in the organization. In order to

understand the working of various departments the information was gathered

from the employs in the organization. The heads of the different department

explained about the departments they are handling and gave me the

necessary information that I need. The information was gathered through

observation. The information was also gathered from the website and thesome records available in the Refinery.

1.5 LIMITATIONS OF THE STUDY

Time was the major constraint. To understand this huge organization and its

working, the period of 24 days is not at all enough.

All the employees were very busy with their work yet could spare a fewseconds for my study.

There are certain data’s which would reveal a part of the business secret that

the company retains for the competitive edge. Such information was

obviously kept undisclosed.



II BUSINESS ENVIRONMENTAL ANALYSIS

2.1 THE PETROLEUM INDUSTRY

The petroleum industry includes the global processes of exploration,

extraction, refining, transporting (often by oil tankers and pipelines), and

marketing petroleum products. The largest volume products of the industry

are fuel oil and gasoline (petrol). Petroleum (oil) is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers,

pesticides, and plastics. The industry is usually divided into three major

components: upstream, midstream and downstream. Midstream operations

are usually included in the downstream category.

Petroleum is vital to many industries, and is of importance to the

maintenance of industrial civilization in its current configuration, and thus is

a critical concern for many nations. Oil accounts for a large percentage of

the world’s energy consumption, ranging from as low of 32% for Europe

and Asia, up to a high of 53% for the Middle East.

Other geographic regions’ consumption patterns are as follows: South and

Central America (44%), Africa (41%), and North America (40%). The world

consumes 30 billion barrels (4.8 km³) of oil per year, with developed nations

being the largest consumers. The United States consumed 25% of the oil

produced in 2007.The production, distribution, refining, and retailing of

petroleum taken as a whole represents the world's largest industry in terms

of dollar value.



PEST ANALYSIS

Political factors

Crude oil is one of the most necessitated worldwide required commodity.

Any slightest fluctuation in crude oil prices can have both direct and indirect

influence on the economy of the countries. The volatility of crude oil prices

drove many companies away. Therefore, prices have been regularly and

closely monitored by economists. Now a days prices have shoot up to record

levels of USD 125 per bbl. This is an increase of nearly 70% from that of the

previous year. The consumption level of oil is projected to be rise by 1.2

million bbl/d in the year 2012. The consumption of China is presumed to be

rise by 0.4 million bbl/d in current year, as it has already registered an

increase of 0.8 million bbl/d in March. Crude oil prices act like any other

product cost with more variation taken place during shortage and excess

supply. Studies have conducted to analyze the impact of rise in crude oil

price to the economic growth in the OPEC (Organization of Petroleum

Exporting Countries) countries. It has been observed that $10 in the crude oil

price means decrease in the economic growth of the OPEC countries

by0.5%. This rise in prices account to have more influence on the economic

condition of developing countries. Any massive increase or decrease in

crude oil has its impact on the condition of stock markets in throughout the

world. The stock exchanges of every country keep a close eye on any up and

downward movement of the crude oil price. India fulfils its major crude oil

requirements by importing it from oil producing nations. India meets more

than 80% of its requirement by importing process. Therefore, any upward



and downward motion of prices are closely tracked in the domestic

marketplace. Many times it has been recorded that prices of essential

products like crude also acts as a prime driver in becoming reason of up and

down movement of price. Keeping in view the conditional status of present

scenario, most of the observers at the international arena is much more

interested in knowing the current oil price and the outcome of this price

burst. These has become a hot bound question in all over world. There tend

to be exist two schools of thought. One side argues that high prices are

cyclical and arise due to the coincidence occurrence of potentially reversible

factors which all are going in the same direction. But the other school of

thoughts opine that there is a fundamental structural change in the oil market

which is pointing towards the shortage of investment from a decade. Both

the thoughts are important. As if the prices are cyclic in nature, there result

will not exist forever but if they are structural then they will tend to be stay

for a longer time period. Any fluctuation in crude oil affects the other

industrial segments also. Higher crude oil price implies to the higher price of

energy, which in turns negatively affects other trading practices that are

directly or indirectly depends on it. Crude Oil has been traded in throughout

the world and there prices are behaving like any other commodity as

swinging more during shortage and excessiveness. In the short term, price of

crude oil is influenced by many factors like socio and political events, status

of financial markets, whereas from medium to long run it is influenced by

the fundamentals of demand and supply which thus results into self price

correction mechanism. This sustained movement in the northern side

underlines some of the fundamental changes in the marketplace. On the

demand supply, where in the past the more and more consumption was come

from the OPEC countries, especially the US but in today's date much of the



incremental demand flow is from emerging economies. Particularly China

and India which have recorded more than 40% contribution in the

incremental global consumption during the time period of 2010-12.

International price of crude oil is projected to shoot up to 100 million barrels

per day by 2015.While demand may touch to a great height, supply will

juggle to keep up the pace. The production from existing sources has been

reduced by 4% per annum, which implies that around 3 million barrels per

day of new capacity is required to be added in every year for offsetting this

declination. There are innumerable factors which influence the price

movement of crude oil in throughout the world. Like methods and

technology using for increase the oil production, storing up of crude oil by

rich and prosperous countries, changes introduced in tax policy, social and

political issues etc. In recent years many factors have emerged as the key

figures in influencing the price index of crude oil in throughout the world.

Economic factors

This industry is extremely open; trade flows are large compared to

production. And there is considerable overlap between oil production and

refining internationally, and to some extent in India. So we begin with a

brief discussion of the international petroleum industry and its components –

refining being one of them. Petroleum is extracted from underground

r eserves; then it is cracked or “refined” into end products for various uses.

The petroleum industry thus has two parts: an oil exploration and production

industry upstream and a refinery industry downstream. Most oil producers

also own refineries. But the reverse is not true; a high proportion of oil is

sold to refinery companies that do not produce crude oil. Sedimentary rocks



in which hydrocarbons are trapped often hold gas, sometimes in association

with crude oil and sometimes alone. It consists mostly of methane, which is

lighter than air and toxic. It therefore requires airtight tanks for storage and

similarly leak-proof pipes or trucks for transport, which raise its capital

costs. Associated gas was flared in early years of the industry; it is still

flared at remote or minor wells where the cost of its collection and transport

would be high, or often re injected into the oilfield to maintain pressure

which forces oil up to the surface. But where the quantities are large enough,

natural gas is mined and traded. It is mainly used as an industrial, domestic

and vehicular fuel. Motor vehicles run almost exclusively on petrol and

high-speed diesel oil, both fuels derived from mineral oil – although they

can be modified to run on certain biofuels. Vehicles are so widely dispersed

that they require an extensive distribution system for these two refinery

products. As motor vehicle use has spread across the world, it has brought

along with it petrol pumps, logistics, storage and supply of fuels. There is

thus a third part of the petroleum industry downstream from refineries which

distributes the products. It is owned by refineries in most countries. But this

is not inevitable. Some countries have distribution chains that are

independent of producers and refiners; and in countries which do not have

refineries, distribution is undertaken by either local or foreign oil companies.

Oil has collected in pools and seeps for thousands of years. The Chinese are

recorded as having extracted oil from wells 800 feet deep through bamboo

pipes in347; they used it to evaporate brine and make salt. American Indians

used to put it to medicinal uses. Persians, Macedonians and Egyptians used

tars to waterproof ships. Babylonians used asphalt in the eighth century to

construct the city’s walls, towers and roads. But the easily available oil was

not put to any mass use because the crude itself was not a good fuel; it gave



out much soot and smoke. A distillation process using a retort was invented

by Rhazes (Muhammad ibnZakariya Razi) in Persia in the 9th century;

liquid heated in it vaporized, passed through a curved spout and condensed

in another container. The process could be used to make kerosene; but it was

more often used to make alcohol and essence of flowers for perfume. It was

a batch process, its fuel consumption was high, and it was not equally

efficient at distilling kerosene from all crudes. A more efficient and reliable

distillation process came out of a series of inventions after 1846. The last

invention was the invention of oil fractionation in 1854 by Benjamin

Silliman, a professor of science in Yale. It used a vertical column which

separated components more efficiently, and which could be used

continuously. Oil was first produced in Titusville, Pennsylvania (USA) in

1859 by one Edwin LDrake, who refined it into kerosene, which was then

used as an illuminant. Electricity did not emerge as an illuminant till the

Edison Electric Light Company was founded in 1878. Well into the 20th

century, kerosene, gas and electricity continued to compete as illuminants.

Whilst the use of gas as an illuminant has virtually disappeared, a large

population, especially in India, continues to use kerosene as illuminant. The

invention of the motor car by Karl Friedrich Benz in 1885 created a market

for petrol, a new refined product (petrol is called Benzin in Germany, but is

not named after Karl Benz). In 1898, Rudolf Diesel invented an engine in

which oil was ignited by compression; the diesel engine he invented came to

power larger vehicles, principally trucks and buses. Diesel engines used a

different fuel, which was named diesel oil. After this, the production and use

of motor vehicles spread rapidly in the United States, especially after 1908

when Henry Ford began mass manufacture of his Model T; and petroleum

and diesel oil became the most important refined products, first in the US



and progressively across the world.The study finds that government

intervention, and slow responsiveness to changing conditions has

contributed to shortages in the past, which in turn leads to action by the

incumbents that look like, but is not, anti-competitive behaviour. Unequal

access to raw material, as well as export/import curbs, are the key issues

affecting the creation of a level playing field. It is the last two as well as

ready availability of information on costs and prices across the value.

Technological effects

Timely, hands-on guide to environmental issues and regulatory standards for

the petroleum industry Environmental analysis and testing methods are an

integral part of any current and future refining activities. Today's petroleum

refining industry must be prepared to meet a growing number of challenges,

both environmental and regulatory. Environmental Analysis and Technology

for the Refining Industry focuses on the analytical issues inherent in any

environmental monitoring or clean-up program as they apply to today's

petroleum industry, not only during the refining process, but also during

recovery operations, transport, storage, and utilization. Designed to help

today's industry professionals identify test methods for monitoring and

clean-up of petroleum-based pollutants, the book provides examples of the

application of environmental regulations to petroleum refining and

petroleum products, as well as current and proposed methods for the

mitigation of environmental effects and waste management. Petroleum

technology, refining, and products, and reviews the nomenclature used by

refiners, environmental scientists, and engineers. Environmental technology

and analysis, and provides information on environmental regulation and the

impact of refining.



Coverage includes:

* In-depth descriptions of analyses related to gaseous emissions, liquid

effluents, and solid waste

* A checklist of relevant environmental regulations

* Numerous real-world examples of the application of environmental

regulations to petroleum refining and petroleum products

* An analysis of current and proposed methods of environmental protection

and waste management.

Efficient reliable and competitively priced energy supplies are prerequisite

for accelerating economic growth. India is currently world’s fifth largest

consumer of energy accounting for 3.9% of world’s annual energy

consumption. USA, China, Russian federation and Japan are the top four

consumers. India’s import dependence on crude oil and petroleum products

is more than 70%. Realization of high economic growth aspirations by the

country in the coming decades, calls for rapid development of energy

market. The India Hydrocarbon Vision-2025 report, which encapsulates

Government’s long-term policy for this sector enunciate therein the long-

term policy covering exploration, refining, marketing infrastructure, gas and

all other related matters in the hydrocarbon sector. The national endeavour is

to bridge the ever-increasing gap between demand and supply of petroleum

products in India by intensifying exploratory efforts for oil and gas in the

Indian sedimentary basins and abroad supported by other alternative sources



of energy like Coal Bed Methane (CBM), Gas Hydrates, Coal Liquefaction,

Ethanol and Bio-diesel etc.Heavy oil consists of over 40% of the

hydrocarbon resources in the world. This does not flow at surface

conditions. Optimizing the recovery of hydrocarbons from existing

producing fields remain an existing challenge.

Social effects

The carrying capacity is the number of individuals that an area can support

without sustaining damage. Carrying capacity is exceeded if so many

individuals use an area that their activities cause deterioration in the very

systems that support them. Exceeding the carrying capacity sometimes

harms an environment so severely that the new number who can be

supported is smaller than the original equilibrium population. The carrying

capacity would then have declined, perhaps permanently.

Any number of elements or systems can be hurt by overuse. A field can be

grazed down until the root systems of grasses are damaged; or so much

game can be hunted off that food species are effectively extripated. Now, the

forages that ate the grass or the predators that killed the game have lost a

food source. In effect, the carrying capacity has been exceeded so that the

population dependant on the area’s productive systems is worse off than it

was originally.



5.1 SWOT ANALYSIS

STRENGTH

1. Increased profitability ratios2. Substantial increase in exports

3. Dominant foothold in the market

4. Vertical integration

WEAKNESS

1. Lack of midstream operations

2. Declining working capital

OPPORTUNITIES

1. Strategic investment in supply chain business

2. Opportunities in unconventional energy sources

3. Retail business opportunities

4. Strategic expansions

THREAT

1. Downturn in the refining sector

2. Low cost petrochemical products

3. Highly competitive domestic market



BIBLIOGRAPHY

The audited financial statements www.ril.com accessed on 15

th

April, 2013

www.eai.com accessed on 20th April, 2013

The changing trend, page 138-150, The Global Refinery Outlook 2012 edition.

www.moneycontrol.com accessed on 2nd May, 2013.

http://www.ril.com/

http://www.ril.com/

http://www.ril.com/

http://www.eai.com/

http://www.eai.com/

http://www.moneycontrol.com/



http://www.eai.com/

http://www.ril.com/

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